Shell halts construction of one of Europe’s largest biofuels facility

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SHELL has announced that its subsidiary, Shell Nederland Raffinaderij, will “temporarily pause” construction of an 820,000 t/y biofuels facility at the Shell Energy and Chemicals Park in Rotterdam, the Netherlands.

Expected to be one of Europe’s largest biofuels facilities, the project was initially slated to come online this year, producing sustainable aviation fuel and renewable diesel from waste. However, Shell has struggled to achieve the proper sequence of project delivery and says the pause will allow it to conduct an impairment review.

Shell also highlighted “current market conditions” as a contributing factor in its decision. Jaime Llinares Taboada, of price reporting company OPIS, said the company’s decision is “likely related to a weaker outlook for renewable diesel and sustainable aviation fuel profit margins”.

The pause will see a slowdown in activity as Shell reduces the number of contractors on site, helping control costs and optimise project sequencing.

“Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s downstream, renewables, and energy solutions director.

He added: “We are committed to our target of achieving net-zero emissions by 2050, with low-carbon fuels as a key part of Shell’s strategy to help us and our customers profitably decarbonise.”

Shell’s Rotterdam announcement follows a decision last year not to move forward with a 550,000 t/y facility to produce sustainable aviation fuel in Singapore.

The company later received criticism for plans to remain committed to its fossil fuels business, mirroring fellow majors BP, ExxonMobil, and Saudi Aramco who have also rolled back on climate goals.